Late this afternoon, Westpac followed its competitors and also passed on a 20-basis-point rate reduction to take its standard home loan rate to 6.51 per cent.

That is the highest of the major banks, except for ANZ which will not announce its response to the latest rate cut until Friday next week.

The Commonwealth Bank says a 20-basis-point cut balances the needs of all its stakeholders.

"In making this decision, the group has continued to balance the needs of 1.8 million home loan borrowers with those of its 11 million depositors and its shareholders, who include 800,000 Australians who own its shares directly, and millions more Australians who own shares through superannuation funds," it noted in a statement.

Westpac and NAB, in their statements, also highlighted the importance of savers in their interest rate deliberations.

However, none of the banks gave an indication of how much deposit rates may be reduced, saying they are still under review.

Both the CBA and NAB home loan rate cuts are effective from December 10, while Westpac's kicks in a week later on December 17.

Treasurer Wayne Swan has welcomed the RBA's decision to cut interest rates, describing it as an "early Christmas present", and demanded the big banks pass the rate cut on to customers.

But shadow treasurer Joe Hockey said no-one should be surprised if the banks continued to ignore the Government, arguing Labor had warned the banks dozens of times to no avail.

Average bank standard variable mortgage rates are likely to be around 6.45 per cent after the latest round of reductions, around 0.7 percentage points higher than they were the last time the RBA's cash rate target was this low.